John Saffrett of brokers Newedge on agility in the financial services sector

On the edge

By Julian Goldsmith

December 9, 2010

CIO UK

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Some IT leaders are only concerned­ with keeping their organisations’ IT machines ticking over. It’s a critical role, but John Saffrett, European CIO and global head of corporate services IT of Newedge isn’t one of those.

Some IT leaders have brought business awareness with them from non-IT backgrounds. Saffrett isn’t one of those either.

He is an example of a CIO who has gone through the ranks in the server room and then re-invented himself into a business leader, much in the same way the organisation he works for has undergone a transformation within the financial services sector.

Newedge acts as a conduit for its clients’­ investments and holds no capital of its own. It has 3000 employees based in its London, Chicago, Paris and Hong Kong hubs, as well as points of presence in around 40 countries. It is a member of over 70 different exchanges. The global IT team numbers around 450 people.

Saffrett notes that the business the company operates in is a rapidly changing envir­onment and it is under intense regulatory pressure.“We’ve got to have agility built into the platforms. We don’t take on huge lumpy projects,” he explains.

From the IT department’s point of view, the biggest task has been integrating the two companys’ IT infrastructures and streamlining the core platforms, so that there is a consistent view for the business across its globally distributed network of offices and hubs.

London, New York and Chicago are the two biggest hubs in the network, with London being the minor partner while still supporting activities across Europe. It has the largest IT presence in Europe with 80 London staff, supported by a further 40 in Paris.

Saffrett is the IT lead for the businesses in Europe, but he also has responsibilities for finance, risk, legal compliance and HR. He is also a virtual CIO for one of the business lines that runs right across the company – prime brokerage. So far, a number of IT systems have been integrated, including a risk monitoring programme, HR systems, core initiatives around trade processing, especially automated or Straight-Through Processing (STP). These point solutions have all been supported by a new transport backbone.

Even if the company wasn’t undergoing a merger integration process, Saffrett points out that it would still be forced to invest in a good deal of IT upgrade by the changes in the regulatory regime.

First there is an increasing regulatory ­focus in off-exchange activities and over-the-counter trades. Then there is the increased regulatory scrutiny in balance sheet reporting and ­liquidity. Finally, there are new regulations around the activities of senior managers (Senior Management Arrangements, Systems and Controls, or SYSC) from the FSA which also have to be complied with.

“These are all causing most companies to revisit their operational models to meet compliance obligations,” says Saffrett.

Alongside the IT programmes that have arisen from the merger and increased regul­atory activity, Saffrett is involved in encouraging some culture change among his employees that runs alongside cultural changes being fostered on the financial services industry as a whole as a result of the credit crunch. They focus on quality control and a sense of responsibility.

As part of a company-wide programme, Saffrett has been rolling out a set of core values and core behaviours that he wants his team to adopt. These are intended to embed an understanding of what a compliance culture means and encourage ­employees to adopt them in their day-to-day activities.

This focus on a specific corporate culture tests Saffrett as a change manager and goes some way towards defining the quality bar that employees within his team have to reach.

“It’s been a demanding period for the team. It’s always been a demanding environment. We quickly know whether people are going to thrive here,” he says.

“Overall, the IT department is respected magnificently, but we continue to have a real focus on talent development. We are a very flat organisation. People can come in and will expand their roles quickly if they have the right talent. Our role as leaders is to support that.”

According to Saffrett, Newedge is a fast-moving, vibrant environment that asks much of its people to keep pace with the changes in its market, yet maintains a fluid management culture and an eye for internal advancement.

It’s this environment that has undoubtedly set the tone for Saffrett’s own career and shaped his attitudes to what he needs to do to progress as a business leader.

After studying computer science at university, he got his first job with a company that sold vehicle finance solutions to car dealerships.

This progressed to going out into the field in an after-sales service capacity to teach car salesmen how to sell car ­finance to customers and increase their profit­ability on each sale. This involved teaching people on how to use technology to sell.

By 2000, he had moved into development and was involved in creating an internet-based vehicle finance quote tool.

Saffrett continued to work in a number of companies within the niche of supplying IT systems for vehicle financing operations when in 2002 the company he was working for, ALD Automotive, was acquired by SocGen.

He continued to develop web-based ­applications for clients to support fleet management over the internet, until SocGen acquired Hertz’s European leasing business and he was involved in integrating its systems with the bank’s backbone.

From there he became FIMAT’s (SocGen’s brokerage subsidiary) deputy CIO in charge of business continuity, moving up to the role of the new joint venture ­Newedge’s European CIO in 2009.

Saffrett moved into the European CIO position internally having formerly held the deputy’s role. His predecessor is still his boss after himself moving into the role of global CIO.

This relationship may suffer from the lack of distance, but Saffrett­ is comfortable with the arrangement.­ The two have ­already formed a productive working relationship that continues to serve them even though they’ve both moved up a notch in the corporate hierarchy.

“It’s great, because I understand him. We’ve known each other for four years. He was a demanding leader, but the way he manages encourages support,” says Saffrett of the relationship.

This demanding relationship undoubtedly prepared Saffrett for the role of European CIO, but it also opened up methods he could use to enhance his leadership abilities. Saffrett’s boss, for instance, used a corporate coach and has encouraged him to do the same.

“Coaching isn’t something a lot of CIOs do. My two big [career] sponsors benefited from it, so I thought it would be beneficial, but it’s not a natural default to get executive-level coaching [as a head of IT],” says Saffrett.

He observes that the IT role hasn’t been seen historically as something that could benefit from executive coaching ­because it’s seen as a service function. But he ­believes it’s essential if IT leaders are to be accepted as business leaders.

The fact that the people he reported to also use the same coach provided a unique learning experience for Saffrett, because not only did he do one-to-one sessions, but he also had three-way sessions that took the course from the theoretical to a real-world learning environment.

So, what’s the big deal about executive coaching? Any IT leader worth their salt will have the technical knowledge to make strategic decisions, but many of them lack the soft skills that ensure they can gain the trust and respect of their non-IT peers. This is a way of acquiring those skills.

Learning the languageFrom the way Saffrett describes the benefits of his experiences, he’s adopted some of the vernacular often used in business circles but seldom heard in the server room.

“You get a frame of reference for under­standing key partners in the firm and what their expectations are. It lets you adapt your approach to meet them,” he says.

“I’ll approach two people very differently depending on how I’ve profiled them. It’s all about getting people to come with you on the journey. With my direct managers having a clear understanding of their expectations of me and what they are looking for in terms of leadership behaviour.”

Saffrett has a specific example of how the coaching he has received has allowed him to grow as a leader. Dealing with setbacks in an emotionally mature manner is often difficult especially in a demanding work environment. But it’s got to be a core behaviour of someone who wants to be regarded as a reliable business leader by their C-suite superiors.

“I worked out I showed a real behaviour challenge in taking criticism. Now I walk with a suit of armour of self-belief,” says Saffrett.

“Having two such demanding bosses, there are always times where they may criticise performance. But the way to approach this is to accept it, learn from it and move on without it affecting your relationships. ­Reacting to criticism equals siloes.”

In many ways, his attitude to leadership has changed so that he sees it in terms of relationships, rather than title or position.

As far as Saffrett is concerned there is no way he would have acquired the sorts of insights and approaches – that allow him to interact with the company’s business leaders as the IT lead within the organisation – along the way without the mentoring and guidance he has received.

“There is no way I would be able to lead without the coaching. If you want to be perceived as a business leader, having an external reference to understand those around you will always help,” he says.

This type of leadership coaching has ­become embedded into Newedge’s management culture and Saffrett is sending­ six of his team on a leadership ­programme, created so that the company can line up its potential senior managers of the future.

Saffrett’s self-driven career development efforts do not end there – he has also studied for a distance-learning MBA run by Nottingham Business School, while working at ALD automotive.

This not only prepared him for a more business-aligned role, but also allowed him to spend time with non-IT business leaders – time that would not have been given over to him in the course of his day-to-day activities as a member of the IT team.

“It was the right decision to do a distance learning course, because every assignment was about applying the learning to our organisation. Anyone doing an MBA straight from university isn’t going to get real value from it, because they won’t have the opportunity to apply what they learn to a job,” he says.

“It was an opportunity for me to talk to corporate communications about our marketing strategy. I talked to the CFO to ­understand our balance sheet properly. CIOs need a level of knowledge in all business areas that you can’t acquire by living in the IT function.”